Oil prices reached a three-week high on Thursday as the market awaited a crucial decision from the OPEC group. Industry analysts are predicting that a production limit agreement will be made in an effort to stabilize energy prices.
The futures for U.S. benchmark West Texas Intermediate crude rose by 0.8% to approximately $78.48 per barrel, reaching as high as $79.50 at one point. This marks the highest oil price since the beginning of November.
The focus is on the upcoming meeting of OPEC, which consists of national producers such as Saudi Arabia, along with their allies including Russia. It is anticipated that this meeting will result in a decision to restrict production.
While there are disagreements within the alliance regarding the extent of the cuts, Raffi Boyadjian, an analyst at broker XM, states, “For now, though, the expectation that some sort of agreement is on the cards is helping oil futures to climb.”
Originally scheduled for last week, the meeting was delayed due to discord surrounding production issues. However, analysts remain hopeful that OPEC will reach a decision in the coming days. Given the impact that rising oil prices had on inflation during the summer months and its implications for monetary policy, investors have been closely monitoring the developments with OPEC that could drive crude prices higher.
“With energy price weakness having played a key role in driving down inflation, all eyes will be on today’s OPEC meeting,” said Joshua Mahony, an analyst at broker Scope Markets.
Mahony further added, “While we have seen concerns grow over the potential struggles in finding an agreement over production levels for nations in Africa, there is speculation that Saudi Arabia will seek to impose additional production limits in an effort to boost energy prices.”
In conclusion, industry experts eagerly await the outcome of the OPEC meeting, as it holds significant importance for the future of oil prices.
